GUEST VLOG: Coronavirus (COVID-19) - Advanced Oxford research into business impacts of the COVID-19 situation on innovation-based companies

Government needs insight and evidence from business to inform policy making at all times – the current environment demands that even more. Advanced Oxford (www.advancedoxford.com) has been collecting insights from Oxfordshire-based innovation/R&D companies since the start of the lockdown via a short survey, with questions on a range of business issues. We received 30 responses from different companies during the first three weeks of the lockdown and we have used these to draw out some of the key issues that innovation-based companies are facing.

Significant concerns relate to investment and cash-flow. 29/30 companies were planning to raise investment within the next 12 months. Asked how investment plans had been impacted by Covid-19, responses included the need to delay fund raising; delays in meeting milestones would impact on investment plans; a small number indicated very negative perceptions: plans “derailed”, the situation being a “disaster”.

All responses to the survey came before the announcement of the Future Fund, which will launch in May - more detail on this scheme is needed. It is clear that many smaller/younger companies will not be eligible. Interventions planned by UKRI, and Innovate UK in particular, will be welcome and further R&D incentives would be useful.

87% of companies were expecting to grow within the next year; now, only 11 companies expect to grow.

“We are an early-stage company, still supposed to be in high-growth, still pre-profit and VC-dependent. This has drastically slowed/stopped revenue growth… instead of hiring, expanding, exponential growth, we are instead faced with survival mode….”(Company response)

Companies indicated that there are a range of things that will help them get through this difficult period.

Further information about the furlough scheme is needed and it is likely that this relates particularly to the duration of the scheme, given that we do not yet know what the arrangements will be for moving out of the lock-down.

Commercial companies within the group have seen negative impacts on sales, 20 – 50%, where the impact was quantified. Over a third of companies are experiencing significant supply chain issues and 80% of companies are experiencing delays or are stalling their R&D activity.

Despite clear business impacts, levels of confidence remain high at this stage. It will, of course, be important to determine how long business confidence is maintained as the lock-down continues. Nevertheless, given the very significant impacts that have been experienced by other sectors of the economy, it is positive to see such resilience among innovation-based companies.

Advanced Oxford is a membership organisation with members drawn from R&D based/innovative companies working across Oxfordshire. We are research-led, providing analysis and a united voice for our members on key issues affecting the development of the innovation ecosystem in the Oxford region.